The business of coffee

This week we’re sharing the latest global coffee production estimates… an annual region-by-region breakdown. Why? Because it’s interesting and we all like some stats and facts now and again. Without further ado:

The US Department of Agriculture predicts a 1.5 million total drop of coffee production in 2014/2015, down to 147.8 million bags. This is despite rising demand worldwide.

Much of this is down to the recent weather issues in Brazil, which we wrote about not long ago. This is slightly offset by rebounds in Colombia, Central America and Mexico however, which are helping to improve global inventory to meet record-high exports and demand.

Let’s look at each key region:

Brazil

• Brazil’s Arabica output is forecast to drop for a second consecutive year to 33.1 million bags, breaking the biennial cycle for the first time in over two decades
• The combined Arabica and Robusta harvest is forecast at 49.5 million bags, down 4.2 million from last year
• Prolonged drought as well as high temperatures in Minas Gerais and Sao Paulo (about 80% of Arabica production) adversely affected the production of beans
• The Robusta harvest is forecast at a record 16.4 million bags as output rebounds 2.1 million from last year’s weather related shortfall in Espirito Santo (Arabic btw is far superior to Robusta… Coffee Planet only uses the finest Arabica)
• Consumption in Brazil remains flat after two decades of steady expansion

Vietnam

• Vietnam’s production is forecast at a record 29.3 million bags, up by 1%
• Exports are forecasting 2 million bags higher to a record 27 million, reversing the recent inventory build-up

Colombia

• Colombia’s production is forecast up 1 million bags to 12 million
• Continued growth is expected following 7 years of below-average output due to the spread of coffee rust and coffee cherry borers
• The rust initially affected as much as 40% of the planted area, but has since declined to less than 10% following an aggressive tree renovation programme
• Exports are forecast to gain 300,000 bags to 10.5 million thanks to increased shipments to the United States and Europe

Central America and Mexico

• After two years of declining output caused by coffee rust, the region is forecast to increase 870,000 bags to 16.2 million
• Honduras is expected to add 400,000 bags to 5 million as rust-resistant trees from recently renovated land reach maturity
• Guatemala is forecast to rebound 200,000 bags to 3.6 million and El Salvador, where production plummeted 60% last year, is forecast to rebound 175,000 bags to 675,000 as more growers implement control measures
• Approximately 40% of Central America and Mexico exports are destined for the United States, followed by 35% to Europe

Indonesia

• Indonesia’s production is forecast to drop 600,000 bags to 8.9 million. For the second consecutive year, excessive rain during cherry development lowered production levels
• Exports are forecast to decline 600,000 bags to 5.4 million due to these lowered volumes

India

• India’s production is forecast to add 100,000 bags to 5.1 million on higher Robusta output in Karnataka, the largest coffee producing state
• Bean exports are forecast unchanged at 3.7 million

European Union

• The European Union accounts for nearly half of the world’s bean imports and is forecast to increase 500,000 bags to a record 46.0 million
• Top suppliers include Brazil (29%), Vietnam (24%) and Indonesia (6%)

The United States

• The United States imports the second-largest amount of coffee beans and is forecast to increase slightly to a record 25 million bags as consumption continues to rise
• Top suppliers include Brazil (25%), Vietnam (18%) and Colombia (13%)

In a nutshell…

The global coffee market will face a shortage for the first time in three years. Brazil is the largest producer of coffee beans on the planet, accounting for one third of total production, and is expected to produce about five million bags less than global demand between 2014 and 2015. In addition to the poor weather conditions there, the farming techniques used to reap coffee beans in Brazil whilst cost reducing, can also slash productivity, which further adds to the problems. Whilst other countries are expected to increase their production, the increased market pressure is set to continue.

Don’t fear however, as your next Jones Brothers Coffee fix is never far from sight as we know how much you love to sip and savour our beautiful beans! Just swing by your local Jumbo or order just in our online store and we deliver direct to your door.

Love what we brew!

The Bean Team